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Gary Goldberg Financial Services President Oliver Pursche explains why Lockheed Martin is more than just a defense company.
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-- spending cuts that are expected to hit the defense industry hard our next guest says Lockheed -- is still one of his favorite stocks.
Oliver pursche said Gary Goldberg financial services president and co portfolio manager of the G and G defense and that beta funds joins us right now.
I'll bet thank you so much for coming not always a pleasure see you like Lockheed Martin despite the fact that we're gonna see some 46 billion dollars in cuts because this -- -- the defense industry.
So Lockheed Martin is much more than just a defense company it's really a technology and security companies so I think there's a little bit of a disconnect in the way some people look at the stock.
Compared to the realities of the company.
Number two the stock is -- down 8% so some of those spending cuts have -- been priced into the sector into the stock.
And really what we look for thematic clean it is company's debt have a strong and growing revenue streams.
Have a high dividend compared to the market and have a history of -- increasing their dividends and Lockheed -- fits that profile very very well which is why we -- the stock as a matter of fact.
It has more than doubled its dividend the last decade which means that you would have doubled your income if you're looking for -- come on that's.
And any like some other high dividend paying stocks as well absolutely and yet so.
The Darden Restaurants is one of them smock GlaxoSmithKline.
Is another name that we really like.
Intel at these levels it's a little bit more volatile usually look for stocks that are less volatile in the market overall but here's another company that at this level -- the twenty dollar range is very very attractive has a very attractive dividend yield.
And have -- based on its balance sheet to raise its dividend and that's one -- critical factors as we going to 2013.
And beyond especially given a hundred point rally in the market since the beginning of the year.
Right searching for dividend always the case if we look.
Let's look at the second quarter and overall stock market obviously you see a pullback right as we keep.
You know we get fiscal clip art to -- -- sequester right now how -- of a -- do you anticipate well if we're lucky.
And I say that in the sense that we are about 10% cash position and our portfolios in the GMT defensive beta -- -- wells must separate accounts -- -- fast if we're lucky we'll see a five to 7% pullback temporary -- very very very temporary in our view I think if you look at the environment overall with low interest rates -- packed with relatively strong corporate earnings.
And the globe in terms of the global economy kind of putting along a two and a half two and three quarters percent that's a perfect environment for the market to reach hires matter fact.
We think that the S&P 500 will see 16100 this year.
Why close a little bit below but keep in mind that's only about 5% from here it's not that big of a number.
We have significant headwinds right now the -- down about fifty points and you know we haven't spoken about -- up the debt crisis wearing its ugly head once again we have these elections potentially.
Political gridlock Italy are you concerned about that well you have to keep an eye on the -- What there's a major shift if you look at the environment in Europe today -- -- a year ago on -- -- specifically that the European central bank and Mario Draghi have said look.
We're going to lay a line down and we're not gonna let anything happen to the eurozone.
Now they can keep that up with spending for a couple of years barring a major crisis today -- had news.
That the -- -- Sony is not doing particularly well in the Italian preliminary elections in terms of the polling so we'll find out tomorrow what that looks like for real.
And on Wednesday that US GDP coming out which is going to be critical we think that US GDP numbers are gonna review revised upward for the fourth quarter of 2012.
Because we think that there's little bit too much negative built in there.
Let's stick with GDP stateside -- and sure in many ways this sequester that will hit us by the end of the week if nothing is done in Washington to prevent it.
Can you say that that hit on GDP can be overcome with auto sales going up home prices going up all of these -- signed an apparent in our economy and so elaborate.
Number one we have to remember it's not 85 billion out of the economy on Friday morning when we wake up it's not.
Gone all at once it is -- timeframe.
Number two there's a big offset -- called sixty billion or about 58 billion after you -- some of the numbers.
For sandy relief that's being spent by the government -- you really talking about 2720.
Billion dollars being taken out of the economy mean there's a big backlog in and pent up demand for auto sales those are big ticket items that can really boost economic report productivity overall for the economy overall.
And then you also have -- there was just some research released by it it's in.
That at this point Saint Louis fed as well.
That housing and availability home home availability in the US is now down to 2001.
Levels well before.
The peak of 06 before things kind of got feverish so there's a good opportunity for housing to perhaps rally some more as well some are so.
You note that the bottom line is that the fear factor is relatively high right now penetration and we always like to say.
You know -- and the can and so on the trumpets and right now the canons of being fired so that's a good time have some cash on hand hopefully do some buying.
Upper down Friday close what is the market -- -- now you putting yeah I'm.
Up from here suspects -- might welcome.
